All Forum Posts by: Richard Balsam

The assignment contract is for your cash buyer only. A purchase contract is for the seller- since you are contracting to purchase their house. They do not know if you have plans to close with, or assign to others. Doesn't really matter. After speaking to two attorneys recently - they both refuse to do a single funded close - meaning, all the talk of having your cash buyer bring all the funds for the B-C closing, which will find your A-B closing - they will not do. They both said I would be "looking for problems with the law" and they both will not be part of it. Not sure if the law changed, or a common law was recently passed that they are now following regarding funding. Either way- transactional funding is needed for your A-B (or other cash) at closing, before you even see your cash buyer in the attorney's waiting room. So...the seller still sees you at closing. 

My opinion is that something somewhere must have happened to now avoid a single sided funding for both transactions. I have also heard that Georgia (and Florida) are cracking down on assignments - due to a provision in the law which says only real estate licensed agents can sell a house they do not own- not members of the public. The assignment is a gray area of the law- since it can be argued that you will be selling a piece of paper - not the house - but I would not want to be the defending that position in court. Talk to a real estate attorney to get more clear on the law. Everyone does assignments - and some attorneys still do the closings, while others refuse. Something doesn't seem right to me when this occurs. Transactional funding removes this problem- since you would own the home and can sell to your cash buyer - just like before. Just a bit more expensive for the use of the funds for a day.

It seems there is a meetup for everything! When I have more time, I will join a few and see if there are investors doing deals at those meetings. Maybe they have wholesale deals, or are looking for some right now. Don't know unless we attend!

Since you are interested in a specific niche- you can check if any keywords bring up this field- but I think your first steps should be to the county to see their requirements for this type of business. They must have definite rules and laws covering the acreage needed, building size, density of the project, ingress/egress from the parking lot, etc -- far more than I even know! Wish I could be more help- good luck with it!

Noooo! Exactly the time I have an ethics class for my CE. Want to go - but have to take this class. Sorry! Looking forward to July's meeting.

I believe in always educating yourself before beginning any new endeavor - whether it's wholesaling, flipping, etc. After years of reviewing wholesale deals- I can promise you only one thing: If you really understand the true costs of what a flip entails, and provide a real estimate of the fix up costs - (and not just some "made up" estimate)- you will gain clients faster than you can find houses. I'm serious... I am so tired of seeing wholesale deals that aren't deals at all. If they provide a $25K estimate for repair - in my mind- I need to almost double that in the numbers to see if it will work. They will underestimate everything from the GC's own expenses, the true cost of the major systems, and all the small stuff that add up quick - even things they know nothing about. Don't even get me started on their estimated ARV numbers! I'm an agent- I know my numbers - the wholesale deals I review - they don't.

Some quick examples...they forgot to mention in the estimate that termites were eating up the back wall? You enter the house and see ants in the back wall area - under the molding pulling away from the wall?...those that really know - will know that ants eat termites- and that is why they are there...things like that! Oh- only another $3-$5K in repairs not even mentioned in the $25K number. Yes- I've seen it. As well as HVAC that don't work, hot water heaters that are rusted inside, roof rats in the attic ( only $2K to seal up the roof ridge line and set traps)...That's why I do not have a lot of faith in wholesale repair estimates - it is always up to every buyer to really know what they are getting in to - with their due diligence. I know it's cliche these days - but vital that buyers know these things.

If you really understand true fix up costs - (not necessarily termite repair costs, roof rats, etc) your ability will set you apart with cash buyers. They still have to do their due diligence- but dealing with an honest wholesaler...would mean everything to them. So go ahead- read and maybe go so far as to meet other's in the industry - take an inspector to lunch to pick his brain if you have to - become an expert and see what happens! Good luck!

I agree with the above. One thing I must add: everything must be in writing in real estate to be enforceable. Therefore, you must give her notice in writing. In Georgia, I understand the law says you must give this notice a minimum of 60 days in advance if you not continuing the lease. (I use this same 60 days to mention rent increases as well, prior to any lease expiration date). This gives her the necessary time to decide whether to buy the property from you- or vacate at the end of the lease. I would give her notice now - to start the clock, so she cannot argue that she didn't have the proper notification.

If you don't do an eviction it may come back to bite you. The foreclosure gave you title to the home, with most liens wiped out, except if there is any IRS, State and FIFA liens. It did not give you possession. Please read that again. It did not give you possession.

Georgia separates possession from title. Same with rentals - possession must be handed back to the landlord - if renters do not leave key and remote control ( another topic for another day). With foreclosures - you do not own any of the items, even if they are in the home. You do not have possession back from the previous owners. You will with an uncontested eviction ( easy when they are not there). Don't do the eviction with personal items and you will be subject to the previous owner's lawsuit. Trust me- I know this law after buying so many at the steps over 13 years. Never had an issue - always filed eviction - even with empty houses. Every time. 

One quick example- if the previous occupants don't take it further: They can easily get $15K from you. It's called small claims court. You never received possession back- and their stuff is missing. The maximum allowable lawsuit is $15K in small claims court in Georgia. The poor tenants left with nothing vs. the big bad investor buying an investment. The judge is going to award who? If you didn't file for eviction - before touching anything...Hmmm. Sorry for the news - that's the law. That's the reason the Sheriff's dept is over a month behind - from so many evictions to do- rentals and foreclosures. You can hire an eviction company with a two week wait time vs 4-6 weeks if the county does it ( yes - it costs a bit more). 

If you ask me what are the chances of tenants suing you in court? Not sure- never been down that route. But I wouldn't want to find out, when I can be safe with 2-4 weeks for the eviction to be done and the Sheriff signing off on everything. BTW- they will tow the car and run a plate check - had this happen twice. Good luck...I hope you didn't touch anything!

Regarding REIA's in Atlanta: There are two large ones, and a ton of Meetup.com groups. Each large REIA has a main meeting and subgroups that specialize in either a topic or a general area. Too many to attend them all in one month, and it repeats the next month! Depending on your area, either: GaReia or AtlantaREIA. I belong to atlreia since it is more in my area, and have a better mix of subgroups for me. Years ago I belonged to GaREIA - but it wasn't for me, after a few years of it.

I am about to check out the Meetup groups - since they are not structured the same, it's hard to tell which ones are worth my time to attend and network. I might just pick a few and see how it goes. This is how I sample what's out there, getting to meet a few good people, and possibly see them again at another event. Maybe find someone to network with, or wholesale something to me, etc. Never know!

You ask a good question! I would answer that two ways 1. As a real estate owner/investor, and 2. as a real estate professional.

As an investor - in order to understand market values, you have to keep your finger in the pulse of the market. How? There will be a ton of answers here, but I do this way: As I see wholesale deals for sale, I open Zillow, see the house, click on the price history of the house to see what's going on, look on the map to see where its located, and watch for the map of house values in that neighborhood that pops up after the map of the house. Next, I attend my REIA meetings, and I absorb what's going on, where investors seem to be buying, and meet other investors that are actually doing something. In my mind, I piece together areas and price points through "osmosis" - by doing a bit of the above. Of course, if I am driving in an area, I will watch for agent signs, sometimes grab a flyer, etc. It all helps.

As an agent: I am also an agent - so I tried to answer the above as the investor in me! If agents don't keep their pulse on market trends- they are not really "active agents" - just people licensed to do an activity that passed a test and know a thing or two about real estate, in case they ever need it - nothing wrong here- just not active in their market. For the ones that take it seriously, they are always in FMLS, attend agent meetings with their broker, network with other agents, attend open houses, drive through new subdivisions, etc. They may also subscribe to the Atlanta Business Journal- (it's a newspaper that details what's happening in real estate, legal and banking around town). They understand trends in pricing, see corporate relocations and what areas the interest is in, and many even know where vacant land is for sale, and watch as developers grab it and what they are planning on doing with it. It all helps them form a solid picture of growth prospects in different areas, so when someone asks them about an area - they already have the knowledge. 

Most of the agent knowledge can be obtained by investors- if they work at it. Anyone can visit new subdivisions, subscribe to magazines, and look through Zillow, etc. The agents have the ability to take it a bit further, but that is why they are agents to begin with- they have an interest in real estate values, trends, etc - that investors may not have the time to learn on their own. 

What I would strongly recommend - since you are new to the area, and the fact that you don't know real traffic until you visit Atlanta!!!  I would suggest you stay for at least a week in an Extnded Stay hotel- or similar hotel close to at least one of the interstates. Since you don't know where you will be working, a signed lease on an apartment in an area with crazy traffic will not be an efficient move! Besides, these hotels have the kitchen so you're not eating out three times per day while looking for work. It will allow you time to catch your breath after a long move, learn the area, figure out the roads, etc, and learn where it's best to live for your commute, schools (if needed) etc. There are a ton of these extended stay hotels - from all the major hotel names, along all the major roads.